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India has 1.3 mn OTT paid video subs, says Frost & Sullivan

Frost-&-Sullivan-techMUMBAI: There are about 66 million unique connected video viewers in India every month, and about 1.3 million over-the-top (OTT) paid video subscribers, according to Frost & Sullivan’s market insight into OTT video market in India.

The report states that, despite challenges, factors like disruptive innovations in technology, as well as business models, will drive the growth of the market over the next five years.

India is considered an attractive market for multi-screen video consumption, which has led to the emergence of numerous OTT service providers in the past two years, including the recent entry of Netflix.

The growth of smartphone penetration and improvement in internet speed has provided ample opportunities for OTT providers, but the Indian market is still in an emerging state, the report noted.

The market insight includes an overview of the market landscape and ecosystem, trends in internet video consumption, forecasts for video viewers and paid subscribers from 2015 to 2020.

Vidya S NathAccording to research director Vidya S Nath, “With an increase in the use of smart devices in India, content owners and aggregators are using non-TV platforms to improve reach and generate revenues through subscription and advertisement. However, it’s hard to woo the Indian consumer. Success in OTT video distribution will depend on the ability to offer variety of content as well as new content at a reasonable price and impeccable user experience.”

The report states that more broadcasters, as along with cable and DTH operators, will be expanding their OTT services over the next five years. However, inadequate bandwidth speeds and the incumbency of YouTube in the market have challenged market participants. Currently, Star India, Sony Pictures and Zee Entertainment have their own OTT platforms while Viacom18 is in the process of launching its own OTT platform Voot.

Broadcasters who have their own content or video platforms with a variety of publishers are driving the market (such as YouTube and Hotstar, BoxTV, Eros Now, Ditto TV). Apart from these, there are but a few small aggregator companies such as YuppTV and Spuul.

“India may have over 225 million internet users, but for consuming video, one needs high-speed broadband access and only about 35% of these users have access to it, says Nath. “OTT video subscription numbers fluctuate dramatically every month. We find that advertising video on demand (AVOD) is the most preferred mode of OTT video delivery in India currently.”

As per the report, there is increasing demand for short video content. This is primarily attributable to the average low internet speeds and changing preferences of many Indian viewers. It is common to find online viewership peak during major sports events like the IPL, elections, or breaking news.

Platforms such as YouTube offer opportunities for independent content creators to publish their videos online without the hassles of negotiation with large networks. The report maintains that the entry of Netflix in India will spur independent professional content production.